Event Wrap-Up: Morgan Richards of Cox Automotive

We were privileged to have Morgan Richards, Senior Manager of Research at Cox Automotive join us for our club luncheon on September 21. Cox Automotive holds more than 20 companies, the two most recognizable of which are Kelly Blue Book and AutoTrader, the group’s only consumer-facing organizations. Cox Automotive primarily provides services and solutions to the auto industry, with around 90% of their business serving automotive dealerships.

Morgan led AAF NETN through a stripped-down, layperson’s version of what can quickly become a data-heavy quagmire. As with most sectors of the marketing world, digital research and data capabilities are turning the car-buying process on its head.

In research done by Cox Automotive,  only 17 out of 4,002 respondents indicated that they were satisfied with the current process for buying a car. Time spent at the dealership was one of the biggest pain points in the process, with satisfaction declining sharply after shoppers had spent more than 90 minutes at a dealership. To add to the misery, nearly 50% of the time spent at the dealership is spent on the most unpleasant parts of the process: financing and paperwork.

So is the answer online car shopping? Cox found that even in the brave new world of 2017, only 21% of respondents were ready for click-to-buy car shopping. But, 87% said they were willing to move some part of the process online.

Morgan highlighted three companies that Cox serves who are taking a different approach:

  • Tesla: The process for buying Elon Musk’s electric automobiles is very different. Tesla’s model is direct-to-consumer, eschewing dealerships for ‘experiential stores’  in the vein of Apple stores. Customers can get hands-on experience with the car at these stores and, with Tesla’s fixed pricing model, know exactly what they’ll pay.
  • CarVana: With car vending machines—yes, you read that correctly—in Atlanta, Houston, and Nashville, Carvana takes shopping for used cars fully online. Customers pick out their car online, finance and sign papers online, and can choose to have their car delivered or visit one of the vending machines, and watch their new car come down the lift.
  • Tred: Tred found a niche in the peer-to-peer car buying space. From their base in the Pacific Northwest, Tred is taking out the middle men (aka: dealerships) and easing the pain of buying and selling your car your way.
One of the most exciting developments Morgan presented, was the rapid evolution of autonomous vehicles. Ranging from your dad’s old ’73 Nova all the way to fully self-driving cars that don’t need no stinking humans, cars fall along a five-point spectrum of autonomy. And, Cox has found that assuming those fully self-sufficient, self-driving cars are available, by 2020, 59% of consumers would consider stepping up the level of autonomy in their car.

Cox also estimates that by 2034, the balance of miles driven by individual car owners versus miles driven by fleet cars will shift in favor of fleet cars. More autonomy means more efficient routes, more cost-effective ride-share models, and fewer people owning their own cars!

The future of the car buying process is evolving to eliminate the worst parts of the process, put power back in the hands of individual consumers, and use the burgeoning tech of autonomous vehicles to get us where we need to go.

Our thanks to Morgan Richards and Cox Automotive for sharing this fantastic presentation with us!